CBC would be ‘eliminated’ as a private broadcaster, Lacroix says

OTTAWA—CBC/Radio-Canada would be devastated if it dropped advertising and eliminated entirely if moved to operate as a private company, the public broadcaster’s president and CEO, Hubert T. Lacroix, said at a communications conference Monday. “There’s a lot of debate right now about public broadcasting—everything from a call to eliminate advertising to privatizing the public broadcasters—which would in fact eliminate them,” Lacroix said at the International Institute of Communications conference in Ottawa. The CBC released a report Monday that it commissioned from the Nordicity Group that examined the impacts on the Crown corporation if it ceased supplementing its publicly funded budget with advertising revenues. Lacroix said he commissioned the study after he was hired as CBC president in early 2008 and he became intrigued by the idea of an ad-free public broadcaster. “But I needed facts to understand the consequences of such a shift and how these dollars could be replaced,” he said. “Nordicity found that the elimination of ad revenues, assuming that the federal government did not make up that difference in some way, would have a devastating effect on our public broadcaster mandate.” Part of the CBC’s mandate requires the broadcaster to “actively contribute to the flow and exchange of cultural expression,” a requirement it fulfills, in part, through the production of Canadian-made shows and programs. It is also required to operate throughout the country “by the most appropriate and efficient means and as resources become available for the purpose,” the CBC’s mandate reads under the Broadcasting Act. “Without advertising, our investment in Canadian programming would have to shrink significantly, by about $160 million a year, and affect our ability to deliver services to Canadians on all of our platforms,” Lacroix said. The Nordicity report, released Monday, says the elimination of ads would cut the CBC’s revenues by about $368 million annually and increase its yearly costs by about $190 million because it would have to fill the time formerly dedicated to ads with other programming. The impacts would also extend to independent Canadian producers and to “the Canadian economy as a whole,” Lacroix said. While private broadcasters would capture a large portion of the advertising revenues leaving the CBC, they wouldn’t take them all, the Nordicity report says. The result would be a net loss of $165 million in economic productivity and about 3,600 jobs, the report says. CBC released the Nordicity report as the Conservative government conducts its strategic and operating review to find $4 billion in annual government savings. All federal departments and agencies, including the CBC, have submitted proposals for budget cutbacks of 5 or 10 per cent. In recent weeks the Conservatives have also stepped up their scrutiny and criticism of the CBC for a lack of transparency about how its spends an annual $1.1 billion in parliamentary appropriations. According to the Nordicity report, advertisers would reduce their inventory in the absence of the CBC’s “advertising vehicle” because they see “considerable value in the audiences CBC/Radio-Canada is able to deliver.” This would lead to higher ad rates, the report says, particularly in smaller markets. Lacroix painted a similarly bleak picture for the programming sector if the CBC was privatized. Under those circumstances, he said, the CBC would spend more on competing with private broadcasters for advertising revenues and less on commissioning Canadian content. It would also spend more on foreign programming. “Under privatization, CBC’s contribution to the economy would be $1.3 billion less than it is now,” Lacroix said. Appearing on a panel Monday that debated the need for public broadcasters, Ezra Levant, a news anchor with the Quebecor Media Inc.-owned Sun News Network and former political aide for the Reform Party and the Canadian Alliance, said “Canada was built in many ways by public initiatives” such as “the railways, Air Canada, cellphone companies.” But the strategic reasons behind those national initiatives and institutions have fallen by the wayside under changing economic circumstances and an evolving Canadian culture, Levant said, rendering government ownership of many Crown corporations unnecessary. Increases in broadcasting diversity within Canada and internationally as well as the widespread availability of content through the Internet mean there is no longer a need to ensure broadcasting services across the country, he said, adding that the CBC should be privatized. “I don’t think the CBC is unique anymore in a 5,000 channel universe,” he said. Levant suggested that the CBC is responsible for Canada’s federal debt, which totals more than $570 billion. “If you add up the amount of money the CBC has received over its 75 years and tack on a modest interest rate, it’s as large as our national debt,” Levant said. “If we did not have 75 year of government subsidy for a national broadcaster, Canada would not have a national debt ... it’s just a fact.” Quebecor and the CBC have been engaged in a public tussle stemming in part from a series of access-to-information requests that Quebecor's news agencies have filed about the public broadcaster. Quebecor's QMI news agency and Sun newspapers regularly feature news about CBC spending and government subsidies. Lacroix said Monday that it is time to break from what he called the “false dichotomy” of this discussion. “The current debate suggests there is a subsidized state broadcaster in one corner and unsubsidized private broadcasters in the other corner,” he said. “That is quite simply a false dichotomy.” He said the debate should focus on promoting the Canadian programming and broadcasting sectors. “If we want to have any substantive outlets for Canadian voices, we will need to subsidize the Canadian broadcasting sector.” nkyonka@thewirereport.ca

CBC would be ‘eliminated’ as a private broadcaster, Lacroix says

Broadcast | November 28, 2011

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